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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-5961564
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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5200 Great America Parkway
Santa Clara, California
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95054
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
Preferred Shares Purchase Rights
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NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Item 1.
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||
Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
|
continued price and margin erosion as a result of increased competition in the microwave transmission industry;
|
•
|
the impact of the volume, timing and customer, product and geographic mix of our product orders;
|
•
|
our ability to meet financial covenant requirements which could impact, among other things, our liquidity;
|
•
|
the timing of our receipt of payment for products or services from our customers;
|
•
|
our ability to meet projected new product development dates or anticipated cost reductions of new products;
|
•
|
our suppliers’ inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints;
|
•
|
customer acceptance of new products;
|
•
|
the ability of our subcontractors to timely perform;
|
•
|
continued weakness in the global economy affecting customer spending;
|
•
|
retention of our key personnel;
|
•
|
our ability to manage and maintain key customer relationships;
|
•
|
uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation;
|
•
|
our failure to protect our intellectual property rights or defend against intellectual property infringement claims by others;
|
•
|
the results of our restructuring efforts;
|
•
|
the ability to preserve and use our net operating loss carryforwards;
|
•
|
the effects of currency and interest rate risks; and
|
•
|
the impact of political turmoil in countries where we have significant business.
|
•
|
New RAN Technologies
. Mobile Radio Access Network (“RAN”) technologies are continually evolving. With evolution from 2G to 3G (HSPA), 4G (HSPA+ and LTE), and next 5G standards, technology is rapidly advancing and providing subscribers with higher speed access to the Internet, social media, and
|
•
|
Subscriber Growth
. Traffic on the backhaul infrastructure increases as the number of unique subscribers grows.
|
•
|
Connected Devices
. The number of devices such as smart phones and tablets connected to the mobile network is far greater than the number of unique subscribers and is continuing to grow as consumers adopt multiple mobile device types. There is also rapid growth in the number and type of wireless enabled sensors and machines being connected to the mobile network creating new revenue streams for network operators in healthcare, agriculture, transportation and education. As a result, the data traffic crossing the backhaul infrastructure continues to grow rapidly.
|
•
|
IoT. The Internet of Things (“IoT”) brings the potential of massive deployment of wireless end points for sensing and reporting data and remotely controlling machines and devices. The increase of data volume drives investment in network infrastructure.
|
•
|
RAN Capacity
. RAN frequency spectrum is a limited resource and shared between all of the devices and users within the coverage area of each base station. Meeting the combined demand of increasing subscribers and devices will require the deployment of much higher densities of base stations with smaller and smaller range (small cells) each requiring backhaul.
|
•
|
Geographic Coverage.
Expanding the geographic area covered by a mobile network requires the deployment of additional Cellular Base Station sites. Each additional base station site also needs to be connected to the core of the mobile network through expansion of the backhaul system.
|
•
|
License Mandates
. Mobile Operators are licensed telecommunications service providers. Licenses will typically mandate a minimum geographic footprint within a specific period of time and/or a minimum proportion of a national or regional population served. This can pace backhaul infrastructure investment and cause periodic spikes in demand.
|
•
|
Evolution to IP
. Network Infrastructure capacity, efficiency and flexibility is greatly enhanced by transitioning from legacy SDH (synchronous digital hierarchy) / SONET (synchronous optical network) / TDM (time division multiplexing) to IP (internet protocol) infrastructure. Our products offer integrated IP transport and routing functionality increasing the value they bring in the backhaul network.
|
•
|
Expansion of Offered Services.
Mobile network operators especially in emerging markets now own and operate the most modern communications networks within their respective regions. These network assets can be further leveraged to provide high speed broadband services to fixed locations such as small, medium and large business enterprises, airports, hotels, hospitals, and educational institutions. Microwave and millimeter wave backhaul is ideally suited to providing high speed broadband connections to these end points due to the lack of fiber infrastructure.
|
•
|
Many utility companies around the world are actively investing in Smart Grid solutions and energy demand management, which drive the need for network modernization and increased capacity of networks.
|
•
|
The investments in network modernization in the public safety market can significantly enhance the capabilities of security agencies. Improving border patrol effectiveness, enabling inter-operable emergency communications services for local or state police, providing access to timely information from centralized databases, or utilizing video and imaging devices at the scene of an incident requires a high bandwidth and reliable network. The mission critical nature of Public Safety and National security networks can require that these networks are built, operated and maintained independently of other public network infrastructure and microwave is very well suited to this environment because it is a cost-effective alternative to fiber.
|
•
|
Microwave technology can be used to engineer long distance and more direct connections than Optical Cable. Microwave signals also travel through the air much faster than light through glass and the combined effect of shorter distance and higher speed reduces latency, which is valued for trading applications in the
|
•
|
The enhancement of Border Security and Surveillance networks to counter terrorism and insurgency is aided by the use of wireless technologies including microwave backhaul.
|
•
|
Broad product and solution portfolio.
We offer a comprehensive suite of wireless transmission networking systems for microwave and millimeter wave networking applications. Our solution consists of tailored offerings of our own wireless products and our own integrated ancillary equipment or that of other manufacturers and providers of element and network management systems and professional services. These
|
•
|
Low total cost of ownership.
Our wireless-based solutions offer a relatively low total cost of ownership, including savings on the combined costs of initial acquisition, installation and ongoing operation and maintenance. Our latest generation system designs reduce rack space requirements, require less power, are software-configurable to reduce spare parts requirements, and are simple to install, operate, upgrade and maintain. Our advanced wireless features can also enable operators to save on related costs, including spectrum fees and tower rental fees.
|
•
|
Futureproof network.
Our solutions are designed to protect the network operator’s investment by incorporating software-configurable capacity upgrades and plug-in modules that provide a smooth migration path to Carrier Ethernet and IP/MPLS (multiprotocol label switching)-based networking, without the need for costly equipment substitutions and additions. Our products include key technologies we believe will be needed by operators for their network evolution to support new broadband services.
|
•
|
Flexible, easily configurable products.
We use flexible architectures with a high level of software configurable features. This design approach produces high-performance products with reusable components while at the same time allowing for a manufacturing strategy with a high degree of flexibility, improved cost and reduced time-to-market. The software features of our products offer our customers a greater degree of flexibility in installing, operating and maintaining their networks.
|
•
|
Comprehensive network management.
We offer a range of flexible network management solutions, from element management to enterprise-wide network management and service assurance that we can optimize to work with our wireless systems.
|
•
|
Complete professional services.
In addition to our product offerings, we provide network planning and design, site surveys and builds, systems integration, installation, maintenance, network monitoring, training, customer service and many other professional services. Our services cover the entire evaluation, purchase, deployment and operational cycle and enable us to be one of the few complete turnkey solution providers in the industry.
|
•
|
AviatCloud.
We have introduced AviatCloud which is an application based platform to automate and virtualize networks and their operations. Initial applications include cloud based network management and microwave network design. Further simplification of network planning, purchasing and lifecycle management will become available as we expand the scope of this application.
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(In thousands)
|
July 1, 2016
|
|
July 3, 2015
|
||||
North America
|
$
|
97,360
|
|
|
$
|
88,242
|
|
International
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56,271
|
|
|
63,489
|
|
||
Total backlog
|
$
|
153,631
|
|
|
$
|
151,731
|
|
Name and Age
|
|
Position Currently Held and Past Business Experience
|
Michael A. Pangia, 55
|
|
Mr. Pangia has been our President and Chief Executive Officer and a member of the Board since July 18, 2011. From March 2009 to July 2011, he served as our Chief Sales Officer responsible for company-wide operations of the global sales and services organization. Prior to joining Aviat Networks, from 2008 to 2009, Mr. Pangia served as Senior Vice President, global sales operations and strategy at Nortel, where he was responsible for all operational aspects of the global sales function. From 2006 to 2008, he was President of Nortel’s Asia region where his key responsibilities included sales and overall business management for all countries where Nortel did business in the region.
|
Ralph Marimon, 59
|
|
Mr. Marimon joined Aviat Networks in May 2015 as our Senior Vice President, Finance and Chief Financial Officer and is responsible for the finance and IT organizations. Before joining Aviat, Mr. Marimon served as Vice President, Finance and Chief Financial Officer of QuickLogic, a provider of ultra-low power, customizable semiconductor solutions for smartphone, tablet, wearable, and mobile enterprise OEMs, since 2008. Prior to QuickLogic, Mr. Marimon served as Chief Financial Officer within a variety of organizations including Anchor Bay Technologies, Inc., Tymphany Corporation, and Scientific Technologies Incorporated. From 1999 to 2003, he served at Com21 Corporation, a global supplier of system solutions for the broadband access market, where he was promoted from Corporate Controller to Vice President of Finance and Chief Financial Officer. Prior to Com21, Mr. Marimon was at KLA-Tencor Corporation for 11 years in a variety of senior executive financial management positions.
|
Meena Elliott, 53
|
|
Ms. Elliott was appointed Senior Vice President, Chief Legal and Administrative Officer, Corporate Secretary in February 2015 and is responsible for the global legal and human resources organizations. From September 2011 to February 2015, she served as Senior Vice President, General Counsel, Secretary and had responsibilities for the global legal organization and took on responsibilities for global human resources organizations in 2014. From July 2009 to August 2011, she served as Vice President, General Counsel and Secretary. She joined our company as Associate General Counsel and Assistant Secretary in January 2007 when Harris Corporation’s MCD and Stratex Networks merged. Ms. Elliott joined MCD as Division Counsel in March 2006. Prior to joining MCD, she was Chief Counsel at the Department of Commerce from 2002 to 2006.
|
Heinz H. Stumpe, 61
|
|
Mr. Stumpe was appointed Chief Sales Officer on June 25, 2012. Before his appointment as Chief Sales Officer, Mr. Stumpe was our Senior Vice President and Chief Operation Officer since June 30, 2008. Previously, he was Vice President, Global Operations for Aviat Networks and Stratex Networks. He joined Stratex Networks as Director of Marketing in 1996. He was promoted to Vice President, Global Accounts in 1999, Vice President, Strategic Accounts in 2002 and Vice President, Global Operations in April 2006.
|
Shaun McFall, 56
|
|
Mr. McFall was appointed Chief Strategy Officer in 2015. He was our Chief Marketing Officer since July 2008. Previously, from 2000 to 2008, he served as Vice President, Marketing for Aviat Networks and Stratex Networks. He has been with us since 1989.
|
•
|
unexpected changes in regulatory requirements;
|
•
|
fluctuations in international currency exchange rates including its impact on unhedgeable currencies and our forecast variations for hedgeable currencies;
|
•
|
imposition of tariffs and other barriers and restrictions;
|
•
|
management and operation of an enterprise spread over various countries;
|
•
|
the burden of complying with a variety of laws and regulations in various countries;
|
•
|
application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty;
|
•
|
general economic and geopolitical conditions, including inflation and trade relationships;
|
•
|
war and acts of terrorism;
|
•
|
kidnapping and high crime rate;
|
•
|
natural disasters;
|
•
|
availabiltity of U.S. dollars especially in countries with economies highly dependent on resource exports, particularly oil; and
|
•
|
changes in export regulations.
|
•
|
seasonality in the purchasing habits of our customers;
|
•
|
the volume and timing of product orders and the timing of completion of our product deliveries and installations;
|
•
|
our ability and the ability of our key suppliers to respond to changes on demand as needed;
|
•
|
margin variability based on geographic and product mix;
|
•
|
our suppliers’ inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints;
|
•
|
retention of key personnel;
|
•
|
the length of our sales cycle;
|
•
|
litigation costs and expenses;
|
•
|
continued timely rollout of new product functionality and features;
|
•
|
increased competition resulting in downward pressure on the price of our products and services;
|
•
|
unexpected delays in the schedule for shipments of existing products and new generations of the existing platforms;
|
•
|
failure to realize expected cost improvement throughout our supply chain;
|
•
|
order cancellations or postponements in product deliveries resulting in delayed revenue recognition;
|
•
|
restructuring and streamlining of our operations;
|
•
|
war and acts of terrorism;
|
•
|
natural disasters;
|
•
|
the ability of our customers to obtain financing to enable their purchase of our products;
|
•
|
fluctuations in international currency exchange rates;
|
•
|
regulatory developments including denial of export and import licenses;
|
•
|
general economic conditions worldwide that affect demand and financing for microwave and millimeter wave telecommunications networks; and
|
•
|
the timing and size of future restructuring plans and write-offs.
|
•
|
rapid technological change in the wireless telecommunications industry resulting in frequent product changes;
|
•
|
the need of our contract manufacturers to order raw materials that have long lead times and our inability to estimate exact amounts and types of items thus needed, especially with regard to the frequencies in which the final products ordered will operate; and
|
•
|
cost reduction initiatives resulting in component changes within the products.
|
•
|
the jurisdictions in which profits are determined to be earned and taxed;
|
•
|
adjustments to estimated taxes upon finalization of various tax returns;
|
•
|
increases in expenses not deductible for tax purposes, including write-offs of acquired in-process research and development and impairment of goodwill in connection with acquisitions;
|
•
|
ability to utilize net operating loss;
|
•
|
changes in available tax credits;
|
•
|
changes in share-based compensation expense;
|
•
|
changes in the valuation of our deferred tax assets and liabilities;
|
•
|
changes in domestic or international tax laws or the interpretation of such tax laws;
|
•
|
the resolution of issues arising from tax audits with various tax authorities;
|
•
|
the tax effects of purchase accounting for acquisitions and restructuring charges that may cause fluctuations between reporting periods; and
|
•
|
taxes that may be incurred upon a repatriation of cash from foreign operations.
|
•
|
difficulties in integrating the operations, systems, technologies, products, and personnel of the acquired companies, particularly companies with large and widespread operations and/or complex products;
|
•
|
diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions;
|
•
|
potential difficulties in completing projects associated with in-process research and development intangibles;
|
•
|
difficulties in entering markets in which we have no or limited direct prior experience and where competitors in each market have stronger market positions;
|
•
|
initial dependence on unfamiliar supply chains or relatively small supply partners;
|
•
|
insufficient revenue to offset increased expenses associated with acquisitions; and
|
•
|
the potential loss of key employees, customers, resellers, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans.
|
•
|
issue common stock that would dilute our current stockholders;
|
•
|
use a substantial portion of our cash resources, or incur debt;
|
•
|
significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition;
|
•
|
assume material liabilities;
|
•
|
record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges;
|
•
|
incur amortization expenses related to certain intangible assets;
|
•
|
incur tax expenses related to the effect of acquisitions on our intercompany R&D cost sharing arrangement and legal structure;
|
•
|
incur large and immediate write-offs and restructuring and other related expenses; and
|
•
|
become subject to intellectual property or other litigation.
|
|
Fiscal 2016
|
|
Fiscal 2015
|
||||
|
High
|
|
Low
|
|
High
|
|
Low
|
First Quarter
|
$15.96
|
|
$12.48
|
|
$21.36
|
|
$13.92
|
Second Quarter
|
$14.04
|
|
$8.92
|
|
$22.80
|
|
$15.84
|
Third Quarter
|
$9.57
|
|
$6.60
|
|
$18.24
|
|
$13.20
|
Fourth Quarter
|
$9.31
|
|
$6.18
|
|
$15.84
|
|
$13.44
|
|
7/1/2011
|
|
6/29/2012
|
|
6/28/2013
|
|
6/27/2014
|
|
7/3/2015
|
|
7/1/2016
|
||||||
Aviat Networks, Inc.
|
100.00
|
|
|
70.70
|
|
|
66.15
|
|
|
31.57
|
|
|
33.21
|
|
|
16.93
|
|
NASDAQ Composite
|
100.00
|
|
|
105.37
|
|
|
123.92
|
|
|
162.15
|
|
|
186.87
|
|
|
183.65
|
|
NASDAQ Telecommunications
|
100.00
|
|
|
87.44
|
|
|
112.30
|
|
|
130.47
|
|
|
136.62
|
|
|
138.62
|
|
*
|
Assumes (i) $100 invested on July 1, 2011 in Aviat Networks, Inc. common stock, the Total Return Index for The NASDAQ Composite Market (U.S. companies) and the NASDAQ Telecommunications Index; and (ii) immediate reinvestment of all dividends.
|
|
Fiscal Year Ended
|
||||||||||||||||||
(In thousands)
|
July 1, 2016
|
|
July 3, 2015
|
|
June 27, 2014(1)
|
|
June 28, 2013(1)
|
|
June 29, 2012(Unaudited) (1)
|
||||||||||
Revenue from product sales and services
|
$
|
268,690
|
|
|
$
|
335,878
|
|
|
$
|
346,032
|
|
|
$
|
471,255
|
|
|
$
|
444,032
|
|
Cost of product sales and services
|
206,973
|
|
|
255,188
|
|
|
260,844
|
|
|
332,913
|
|
|
312,639
|
|
|||||
Loss from continuing operations
(2) (3)
|
(30,178
|
)
|
|
(24,648
|
)
|
|
(52,018
|
)
|
|
(12,647
|
)
|
|
(15,822
|
)
|
|||||
Net loss
(2) (3)
|
(29,637
|
)
|
|
(24,554
|
)
|
|
(51,100
|
)
|
|
(16,725
|
)
|
|
(24,466
|
)
|
|||||
Net income attributable to noncontrolling interests, net of tax
|
270
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss attributable to Aviat Networks
(2) (3)
|
(29,907
|
)
|
|
(24,625
|
)
|
|
(51,100
|
)
|
|
(16,725
|
)
|
|
(24,466
|
)
|
|||||
Basic and diluted loss per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations
|
$
|
(5.81
|
)
|
|
$
|
(4.77
|
)
|
|
$
|
(10.13
|
)
|
|
$
|
(2.53
|
)
|
|
$
|
(3.22
|
)
|
Net loss
|
(5.71
|
)
|
|
(4.75
|
)
|
|
(9.95
|
)
|
|
(3.34
|
)
|
|
(4.97
|
)
|
(1)
|
As revised, during the fourth quarter of fiscal 2015, these amounts have been revised as we identified and corrected errors around our accrued liability related to cost of services revenue.
|
(2)
|
Include share-based compensation expense
$1.8 million
,
$2.2 million
,
$3.4 million
,
$6.4 million
and
$5.2 million
for fiscal 2016, 2015, 2014, 2013 and 2012 respectively.
|
(3)
|
Include restructuring charges of
$2.5 million
,
$4.9 million
,
$11.2 million
,
$3.1 million
and
$2.3 million
for fiscal 2016, 2015, 2014, 2013 and 2012 respectively.
|
|
As of
|
||||||||||||||||||
(In thousands)
|
July 1, 2016
|
|
July 3, 2015
|
|
June 27, 2014(1)
|
|
June 28, 2013(1)
|
|
June 29, 2012(Unaudited) (1)
|
||||||||||
Total assets
|
$
|
166,111
|
|
|
$
|
224,715
|
|
|
$
|
253,184
|
|
|
$
|
305,816
|
|
|
$
|
329,634
|
|
Long-term liabilities
|
12,707
|
|
|
18,198
|
|
|
19,574
|
|
|
24,825
|
|
|
24,747
|
|
(1)
|
As revised, during the fourth quarter of fiscal 2015, these amounts have been revised as we identified and corrected errors around our accrued liability related to cost of services revenue.
|
|
Fiscal Year
|
|
$ Change
|
|
% Change
|
||||||||||||||||||||
(In thousands, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
|
2016/2015
|
|
2015/2014
|
||||||||||||
North America
|
$
|
125,482
|
|
|
$
|
153,239
|
|
|
$
|
142,027
|
|
|
$
|
(27,757
|
)
|
|
$
|
11,212
|
|
|
(18.1
|
)%
|
|
7.9
|
%
|
Africa and Middle East
|
82,742
|
|
|
97,112
|
|
|
108,906
|
|
|
(14,370
|
)
|
|
(11,794
|
)
|
|
(14.8
|
)%
|
|
(10.8
|
)%
|
|||||
Europe and Russia
|
20,539
|
|
|
35,990
|
|
|
36,043
|
|
|
(15,451
|
)
|
|
(53
|
)
|
|
(42.9
|
)%
|
|
(0.1
|
)%
|
|||||
Latin America and Asia Pacific
|
39,927
|
|
|
49,537
|
|
|
59,056
|
|
|
(9,610
|
)
|
|
(9,519
|
)
|
|
(19.4
|
)%
|
|
(16.1
|
)%
|
|||||
Total Revenue
|
$
|
268,690
|
|
|
$
|
335,878
|
|
|
$
|
346,032
|
|
|
$
|
(67,188
|
)
|
|
$
|
(10,154
|
)
|
|
(20.0
|
)%
|
|
(2.9
|
)%
|
|
Fiscal Year
|
|
$ Change
|
|
% Change
|
||||||||||||||||||||
(In thousands, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
|
2016/2015
|
|
2015/2014
|
||||||||||||
Research and development expenses
|
$
|
20,806
|
|
|
$
|
25,368
|
|
|
$
|
35,478
|
|
|
$
|
(4,562
|
)
|
|
$
|
(10,110
|
)
|
|
(18.0
|
)%
|
|
(28.5
|
)%
|
% of revenue
|
7.7
|
%
|
|
7.6
|
%
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
$ Change
|
|
% Change
|
||||||||||||||||||||
(In thousands, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
|
2016/2015
|
|
2015/2014
|
||||||||||||
Fiscal 2016-2017 Plan
|
$
|
2,210
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,210
|
|
|
$
|
—
|
|
|
N/A
|
|
|
N/A
|
|
Fiscal 2015-2016 Plan
|
282
|
|
|
3,503
|
|
|
—
|
|
|
(3,221
|
)
|
|
3,503
|
|
|
(91.9
|
)%
|
|
N/A
|
|
|||||
Fiscal 2014-2015 Plan
|
77
|
|
|
1,277
|
|
|
5,852
|
|
|
(1,200
|
)
|
|
(4,575
|
)
|
|
(94.0
|
)%
|
|
(78.2
|
)%
|
|||||
Fiscal 2013-2014 Plan
|
(114
|
)
|
|
87
|
|
|
5,407
|
|
|
(201
|
)
|
|
(5,320
|
)
|
|
(231.0
|
)%
|
|
(98.4
|
)%
|
|||||
Fiscal 2011 Plan
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
—
|
|
|
61
|
|
|
N/A
|
|
|
(100.0
|
)%
|
|||||
Total
|
$
|
2,455
|
|
|
$
|
4,867
|
|
|
$
|
11,198
|
|
|
$
|
(2,412
|
)
|
|
$
|
(6,331
|
)
|
|
(49.6
|
)%
|
|
(56.5
|
)%
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Interest income
|
$
|
252
|
|
|
$
|
360
|
|
|
$
|
480
|
|
Interest expense
|
(104
|
)
|
|
(388
|
)
|
|
(389
|
)
|
|||
Other expense
|
(1,245
|
)
|
|
—
|
|
|
—
|
|
|
Fiscal Year
|
|
$ Change
|
||||||||||||||||
(In thousands, except percentages)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||||
Loss from continuing operations before income taxes
|
$
|
(28,543
|
)
|
|
$
|
(25,958
|
)
|
|
$
|
(50,553
|
)
|
|
$
|
(2,585
|
)
|
|
$
|
24,595
|
|
Provision for (benefit from) income taxes
|
1,635
|
|
|
(1,310
|
)
|
|
1,465
|
|
|
2,945
|
|
|
(2,775
|
)
|
|||||
As % of loss from continuing operations before income taxes
|
(5.7
|
)%
|
|
5.0
|
%
|
|
(2.9
|
)%
|
|
|
|
|
|
Fiscal Year
|
|
$ Change
|
||||||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
|
2016/2015
|
|
2015/2014
|
||||||||||
Income from discontinued operations, net of tax
|
$
|
541
|
|
|
$
|
94
|
|
|
$
|
918
|
|
|
$
|
447
|
|
|
$
|
(824
|
)
|
|
Obligations Due by Fiscal Year
|
||||||||||||||||||||||
(In thousands)
|
Total
|
|
< 1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
> 5 years
|
|
Other
|
||||||||||||
Borrowings under credit facility
|
$
|
9,000
|
|
|
$
|
9,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchase obligations
(1)(4)
|
21,668
|
|
|
21,316
|
|
|
352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other purchase obligations
(3)(4)
|
2,160
|
|
|
1,334
|
|
|
826
|
|
|
—
|
|
|
—
|
|
|
|
|||||||
Operating lease commitments
(4)
|
11,722
|
|
|
4,217
|
|
|
3,548
|
|
|
1,726
|
|
|
2,231
|
|
|
—
|
|
||||||
Reserve for uncertain tax positions
(2)
|
1,414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,414
|
|
||||||
Total contractual cash obligations
|
$
|
45,964
|
|
|
$
|
35,867
|
|
|
$
|
4,726
|
|
|
$
|
1,726
|
|
|
$
|
2,231
|
|
|
$
|
1,414
|
|
(1)
|
From time to time in the normal course of business we may enter into purchasing agreements with our suppliers that require us to accept delivery of, and remit full payment for, finished products that we have ordered, finished products that we requested be held as safety stock, and work in process started on our behalf in the event we cancel or terminate the purchasing agreement. Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements.
|
(2)
|
Liabilities for uncertain tax positions of
$1.4 million
were included in long-term liabilities in the consolidated balance sheet. At this time, we are unable to make a reasonably reliable estimate of the timing of payments related to this amount due to uncertainties in the timing of tax audit outcomes.
|
(3)
|
Contractual obligation related to software licenses.
|
(4)
|
These items are not recorded on our consolidated balance sheet.
|
|
Expiration of Commitments by Fiscal Year
|
||||||||||||||||||
(In thousands)
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
After 2020
|
||||||||||
Standby letters of credit used for:
|
|
|
|
|
|
|
|
|
|
||||||||||
Bids
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Performance
|
6,511
|
|
|
3,777
|
|
|
176
|
|
|
2,538
|
|
|
20
|
|
|||||
Tax and payment guarantees
|
303
|
|
|
190
|
|
|
5
|
|
|
—
|
|
|
108
|
|
|||||
|
6,818
|
|
|
3,971
|
|
|
181
|
|
|
2,538
|
|
|
128
|
|
|||||
Surety bonds used for:
|
|
|
|
|
|
|
|
|
|
||||||||||
Bids
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Performance
|
19,328
|
|
|
8,146
|
|
|
—
|
|
|
11,182
|
|
|
—
|
|
|||||
Tax and payment guarantees
|
3,669
|
|
|
3,634
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|||||
|
23,005
|
|
|
11,788
|
|
|
35
|
|
|
11,182
|
|
|
—
|
|
|||||
Total commercial commitments
|
$
|
29,823
|
|
|
$
|
15,759
|
|
|
$
|
216
|
|
|
$
|
13,720
|
|
|
$
|
128
|
|
•
|
any obligation under certain guarantee contracts;
|
•
|
a retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;
|
•
|
any obligation, including a contingent obligation, under certain derivative instruments; and
|
•
|
any obligation, including a contingent obligation, under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant.
|
Currency
|
|
Notional Contract Amount
(Local Currency)
|
|
Notional
Contract
Amount
(USD)
|
|||
|
|
(In thousands)
|
|||||
British Pound
|
|
750
|
|
|
$
|
1,005
|
|
Euro
|
|
600
|
|
|
669
|
|
|
Total of all currency forward contracts
|
|
|
|
$
|
1,674
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Amount included in costs of revenues
|
$
|
(556
|
)
|
|
$
|
(3,308
|
)
|
|
$
|
(772
|
)
|
Amount included in other expense
|
(1,245
|
)
|
|
—
|
|
|
—
|
|
|||
Total foreign exchange loss, net
|
$
|
(1,801
|
)
|
|
$
|
(3,308
|
)
|
|
$
|
(772
|
)
|
•
|
revenue recognition and valuation of accounts receivable;
|
•
|
inventory valuation and provision for excess and obsolete inventory losses;
|
•
|
impairment of long-lived assets; and
|
•
|
income taxes and tax valuation allowances.
|
•
|
Persuasive evidence of an arrangement exists. Contracts and/or customer purchase orders are generally used to determine the existence of an arrangement.
|
•
|
Delivery has occurred or services have been delivered. Shipping documents and customer acceptance, when applicable, are used to verify delivery.
|
•
|
The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
•
|
Collectability is reasonably assured. We assess collectability based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history.
|
|
|
|
Page
|
|
|
/s/ BDO USA, LLP
|
|
|
/s/ KPMG LLP
|
Santa Clara, California
December 19, 2014
|
|
|
|
Fiscal Year Ended
|
||||||||||
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
|
June 27,
2014 |
||||||
Net loss
|
$
|
(29,637
|
)
|
|
$
|
(24,554
|
)
|
|
$
|
(51,100
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Change in unrealized loss on cash flow hedges
|
—
|
|
|
(314
|
)
|
|
(266
|
)
|
|||
Reclassification adjustments for (gain) loss included in net loss
|
(41
|
)
|
|
321
|
|
|
162
|
|
|||
Net change in unrealized (loss) gain on hedging activities
|
(41
|
)
|
|
7
|
|
|
(104
|
)
|
|||
Net change in cumulative translation adjustment
|
(2,488
|
)
|
|
(5,672
|
)
|
|
470
|
|
|||
Other comprehensive (loss) income
|
(2,529
|
)
|
|
(5,665
|
)
|
|
366
|
|
|||
Comprehensive loss
|
(32,166
|
)
|
|
(30,219
|
)
|
|
(50,734
|
)
|
|||
Comprehensive income attributable to noncontrolling interests, net of tax
|
270
|
|
|
71
|
|
|
—
|
|
|||
Comprehensive loss attributable to Aviat Networks
|
$
|
(32,436
|
)
|
|
$
|
(30,290
|
)
|
|
$
|
(50,734
|
)
|
(In thousands, except share and par value amounts)
|
July 1, 2016
|
|
July 3, 2015
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
30,479
|
|
|
$
|
34,735
|
|
Short-term investments
|
222
|
|
|
—
|
|
||
Accounts receivable, net
|
63,449
|
|
|
83,532
|
|
||
Unbilled costs
|
5,117
|
|
|
17,289
|
|
||
Inventories
|
27,293
|
|
|
32,933
|
|
||
Customer service inventories
|
3,064
|
|
|
6,180
|
|
||
Deferred income taxes
|
—
|
|
|
1,462
|
|
||
Other current assets
|
10,790
|
|
|
14,997
|
|
||
Total current assets
|
140,414
|
|
|
191,128
|
|
||
Property, plant and equipment, net
|
18,162
|
|
|
24,255
|
|
||
Deferred income taxes
|
6,068
|
|
|
7,627
|
|
||
Other assets, including restricted cash
|
1,467
|
|
|
1,705
|
|
||
Total long-term assets
|
25,697
|
|
|
33,587
|
|
||
TOTAL ASSETS
|
$
|
166,111
|
|
|
$
|
224,715
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
9,000
|
|
|
$
|
9,000
|
|
Accounts payable
|
33,217
|
|
|
46,580
|
|
||
Accrued expenses
|
23,205
|
|
|
27,214
|
|
||
Advance payments and unearned income
|
30,615
|
|
|
35,894
|
|
||
Deferred income taxes
|
—
|
|
|
169
|
|
||
Restructuring liabilities
|
3,910
|
|
|
3,851
|
|
||
Total current liabilities
|
99,947
|
|
|
122,708
|
|
||
Unearned income
|
8,387
|
|
|
9,837
|
|
||
Other long-term liabilities
|
1,409
|
|
|
2,243
|
|
||
Reserve for uncertain tax positions
|
1,414
|
|
|
1,435
|
|
||
Deferred income taxes
|
1,497
|
|
|
4,683
|
|
||
Total liabilities
|
112,654
|
|
|
140,906
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 300,000,000 shares authorized; 5,261,041 and 5,208,200 shares issued and outstanding as of as of July 1, 2016 and July 3, 2015, respectively
|
53
|
|
|
52
|
|
||
Additional paid-in-capital
|
811,601
|
|
|
809,788
|
|
||
Accumulated deficit
|
(747,381
|
)
|
|
(717,474
|
)
|
||
Accumulated other comprehensive loss
|
(11,157
|
)
|
|
(8,628
|
)
|
||
Total Aviat Networks stockholders’ equity
|
53,116
|
|
|
83,738
|
|
||
Noncontrolling interests
|
341
|
|
|
71
|
|
||
Total equity
|
53,457
|
|
|
83,809
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
166,111
|
|
|
$
|
224,715
|
|
|
Fiscal Year Ended
|
||||||||||
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
|
June 27,
2014 |
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(29,637
|
)
|
|
$
|
(24,554
|
)
|
|
$
|
(51,100
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Amortization of identifiable intangible assets
|
—
|
|
|
380
|
|
|
380
|
|
|||
Depreciation and amortization of property, plant and equipment
|
6,648
|
|
|
7,242
|
|
|
7,139
|
|
|||
Provision for uncollectible receivables
|
1,532
|
|
|
880
|
|
|
835
|
|
|||
Share-based compensation
|
1,836
|
|
|
2,187
|
|
|
3,421
|
|
|||
Deferred tax assets, net
|
(334
|
)
|
|
(4,711
|
)
|
|
(337
|
)
|
|||
Charges for inventory and customer service inventory write-downs
|
9,868
|
|
|
8,043
|
|
|
7,171
|
|
|||
Gain on disposition of WiMAX business
|
—
|
|
|
(85
|
)
|
|
—
|
|
|||
Loss (gain) on disposition of property, plant and equipment, net
|
827
|
|
|
384
|
|
|
(55
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
17,023
|
|
|
(8,816
|
)
|
|
8,238
|
|
|||
Unbilled costs
|
12,041
|
|
|
6,125
|
|
|
5,117
|
|
|||
Inventories
|
(4,995
|
)
|
|
(663
|
)
|
|
(7,020
|
)
|
|||
Customer service inventories
|
2,419
|
|
|
2,285
|
|
|
1,509
|
|
|||
Accounts payable
|
(13,976
|
)
|
|
1,562
|
|
|
(2,739
|
)
|
|||
Accrued expenses
|
(599
|
)
|
|
(4,140
|
)
|
|
(6,452
|
)
|
|||
Advance payments and unearned income
|
(4,425
|
)
|
|
4,666
|
|
|
14,602
|
|
|||
Income taxes payable or receivable
|
2
|
|
|
1,450
|
|
|
(11,940
|
)
|
|||
Other assets and liabilities
|
1,644
|
|
|
(1,207
|
)
|
|
1,979
|
|
|||
Net cash used in operating activities
|
(126
|
)
|
|
(8,972
|
)
|
|
(29,252
|
)
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Payments for acquisition of property, plant and equipment
|
(1,574
|
)
|
|
(3,693
|
)
|
|
(9,414
|
)
|
|||
Purchase of short-term investments
|
(222
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(1,796
|
)
|
|
(3,693
|
)
|
|
(9,414
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
36,000
|
|
|
54,000
|
|
|
—
|
|
|||
Repayments of borrowings
|
(36,000
|
)
|
|
(51,000
|
)
|
|
(2,752
|
)
|
|||
Proceeds from issuance of common stock under employee stock plans
|
13
|
|
|
13
|
|
|
98
|
|
|||
Payments on capital lease obligations
|
—
|
|
|
(140
|
)
|
|
(144
|
)
|
|||
Net cash provided by (used in) financing activities
|
13
|
|
|
2,873
|
|
|
(2,798
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,347
|
)
|
|
(4,246
|
)
|
|
254
|
|
|||
Net decrease in cash and cash equivalents
|
(4,256
|
)
|
|
(14,038
|
)
|
|
(41,210
|
)
|
|||
Cash and cash equivalents, beginning of year
|
34,735
|
|
|
48,773
|
|
|
89,983
|
|
|||
Cash and cash equivalents, end of year
|
$
|
30,479
|
|
|
$
|
34,735
|
|
|
$
|
48,773
|
|
|
|
|
|
|
|
||||||
Non-cash investing activities
|
|
|
|
|
|
||||||
Reclassification of property, plant and equipment to inventory
|
$
|
1,094
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
111
|
|
|
$
|
387
|
|
|
$
|
389
|
|
Cash paid for income taxes
|
$
|
1,964
|
|
|
$
|
2,042
|
|
|
$
|
14,727
|
|
|
Aviat Networks Stockholders’ Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total Aviat Networks Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||||
(In thousands, except share amounts)
|
Shares
|
|
$
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of June 28, 2013
|
5,104,374
|
|
|
$
|
51
|
|
|
$
|
804,069
|
|
|
$
|
(641,749
|
)
|
|
$
|
(3,329
|
)
|
|
$
|
159,042
|
|
|
$
|
—
|
|
|
$
|
159,042
|
|
Net loss
|
|
|
|
|
|
|
(51,100
|
)
|
|
|
|
(51,100
|
)
|
|
|
|
(51,100
|
)
|
||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
366
|
|
|
366
|
|
|
|
|
366
|
|
||||||||||||
Issuance of common stock under employee stock plans
|
80,478
|
|
|
1
|
|
|
98
|
|
|
|
|
|
|
99
|
|
|
|
|
99
|
|
||||||||||
Share-based compensation
|
|
|
|
|
|
|
3,421
|
|
|
|
|
|
|
3,421
|
|
|
|
|
3,421
|
|
||||||||||
Balance as of June 27, 2014
|
5,184,852
|
|
|
52
|
|
|
807,588
|
|
|
(692,849
|
)
|
|
(2,963
|
)
|
|
111,828
|
|
|
—
|
|
|
111,828
|
|
|||||||
Net (loss) income
|
|
|
|
|
|
|
(24,625
|
)
|
|
|
|
(24,625
|
)
|
|
71
|
|
|
(24,554
|
)
|
|||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(5,665
|
)
|
|
(5,665
|
)
|
|
|
|
(5,665
|
)
|
||||||||||||
Issuance of common stock under employee stock plans
|
23,348
|
|
|
|
|
|
13
|
|
|
|
|
|
|
13
|
|
|
|
|
13
|
|
||||||||||
Share-based compensation
|
|
|
|
|
|
|
2,187
|
|
|
|
|
|
|
2,187
|
|
|
|
|
2,187
|
|
||||||||||
Balance as of July 3, 2015
|
5,208,200
|
|
|
52
|
|
|
809,788
|
|
|
(717,474
|
)
|
|
(8,628
|
)
|
|
83,738
|
|
|
71
|
|
|
83,809
|
|
|||||||
Net (loss) income
|
|
|
|
|
|
|
(29,907
|
)
|
|
|
|
(29,907
|
)
|
|
270
|
|
|
(29,637
|
)
|
|||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(2,529
|
)
|
|
(2,529
|
)
|
|
|
|
(2,529
|
)
|
||||||||||||
Issuance of common stock under employee stock plans
|
54,498
|
|
|
1
|
|
|
12
|
|
|
|
|
|
|
13
|
|
|
|
|
13
|
|
||||||||||
Fractional shares buyback and other
|
(1,657
|
)
|
|
|
|
|
(35
|
)
|
|
|
|
|
|
(35
|
)
|
|
|
|
(35
|
)
|
||||||||||
Share-based compensation
|
|
|
|
|
|
|
1,836
|
|
|
|
|
|
|
1,836
|
|
|
|
|
1,836
|
|
||||||||||
Balance as of July 1, 2016
|
5,261,041
|
|
|
$
|
53
|
|
|
$
|
811,601
|
|
|
$
|
(747,381
|
)
|
|
$
|
(11,157
|
)
|
|
$
|
53,116
|
|
|
$
|
341
|
|
|
$
|
53,457
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Amount included in costs of revenues
|
$
|
(556
|
)
|
|
$
|
(3,308
|
)
|
|
$
|
(772
|
)
|
Amount included in other expense
|
(1,245
|
)
|
|
—
|
|
|
—
|
|
|||
Total foreign exchange loss, net
|
$
|
(1,801
|
)
|
|
$
|
(3,308
|
)
|
|
$
|
(772
|
)
|
•
|
Persuasive evidence of an arrangement exists. Contracts and/or customer purchase orders are generally used to determine the existence of an arrangement.
|
•
|
Delivery has occurred or services have been delivered. Shipping documents and customer acceptance, when applicable, are used to verify delivery.
|
•
|
The fee is fixed or determinable. We assess whether the fee is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
•
|
Collectibility is reasonably assured. We assess collectibility based primarily on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history.
|
(In thousands)
|
Foreign
Currency
Translation
Adjustment
(“CTA”)
|
|
Hedging
Derivatives
|
|
Total
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||
Balance as of June 28, 2013
|
$
|
(3,467
|
)
|
|
$
|
138
|
|
|
$
|
(3,329
|
)
|
Other comprehensive income (loss) before reclassification
|
470
|
|
|
(266
|
)
|
|
204
|
|
|||
Less: reclassification for amounts included in net loss
|
—
|
|
|
162
|
|
|
162
|
|
|||
Balance as of June 27, 2014
|
(2,997
|
)
|
|
34
|
|
|
(2,963
|
)
|
|||
Other comprehensive loss before reclassification
|
(5,672
|
)
|
|
(314
|
)
|
|
(5,986
|
)
|
|||
Less: reclassification for amounts included in net loss
|
—
|
|
|
321
|
|
|
321
|
|
|||
Balance as of July 3, 2015
|
(8,669
|
)
|
|
41
|
|
|
(8,628
|
)
|
|||
Other comprehensive loss before reclassification
|
(2,488
|
)
|
|
—
|
|
|
(2,488
|
)
|
|||
Less: reclassification for amounts included in net loss
|
—
|
|
|
(41
|
)
|
|
(41
|
)
|
|||
Balance as of July 1, 2016
|
$
|
(11,157
|
)
|
|
$
|
—
|
|
|
$
|
(11,157
|
)
|
|
Fiscal Year
|
|||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
|||
Stock options
|
538
|
|
|
613
|
|
|
621
|
|
Restricted stocks and units and performance shares and units
|
258
|
|
|
42
|
|
|
51
|
|
Total potential shares of common stock excluded
|
796
|
|
|
655
|
|
|
672
|
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
Accounts receivable
|
$
|
71,416
|
|
|
$
|
90,173
|
|
Less: allowances for collection losses
|
(7,967
|
)
|
|
(6,641
|
)
|
||
|
$
|
63,449
|
|
|
$
|
83,532
|
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
Finished products
|
$
|
20,044
|
|
|
$
|
21,125
|
|
Work in process
|
5,104
|
|
|
3,775
|
|
||
Raw materials and supplies
|
2,145
|
|
|
8,033
|
|
||
Total inventories
|
$
|
27,293
|
|
|
$
|
32,933
|
|
Deferred cost of revenue included within finished goods
|
$
|
5,984
|
|
|
$
|
2,214
|
|
Consigned inventories included within raw materials
|
$
|
2,035
|
|
|
$
|
6,760
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Excess and obsolete inventory charges
|
$
|
9,175
|
|
|
$
|
6,291
|
|
|
$
|
3,955
|
|
Customer service inventory write-downs
|
693
|
|
|
1,752
|
|
|
3,216
|
|
|||
|
$
|
9,868
|
|
|
$
|
8,043
|
|
|
$
|
7,171
|
|
As % of revenue
|
3.7
|
%
|
|
2.4
|
%
|
|
2.1
|
%
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
Land
|
$
|
710
|
|
|
$
|
710
|
|
Buildings and leasehold improvements
|
11,714
|
|
|
9,727
|
|
||
Software
|
14,620
|
|
|
13,565
|
|
||
Machinery and equipment
|
42,960
|
|
|
45,197
|
|
||
|
70,004
|
|
|
69,199
|
|
||
Less accumulated depreciation and amortization
|
(51,842
|
)
|
|
(44,944
|
)
|
||
|
$
|
18,162
|
|
|
$
|
24,255
|
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
Accrued compensation and benefits
|
$
|
7,161
|
|
|
$
|
7,528
|
|
Accrued commissions
|
3,551
|
|
|
4,380
|
|
||
Accrued warranties
|
3,944
|
|
|
4,221
|
|
||
Other
|
8,549
|
|
|
11,085
|
|
||
|
$
|
23,205
|
|
|
$
|
27,214
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Balance as of the beginning of the fiscal year
|
$
|
4,221
|
|
|
$
|
3,777
|
|
|
$
|
3,267
|
|
Warranty provision recorded during the period
|
3,462
|
|
|
5,595
|
|
|
5,234
|
|
|||
Consumption during the period
|
(3,739
|
)
|
|
(5,151
|
)
|
|
(4,724
|
)
|
|||
Balance as of the end of the period
|
$
|
3,944
|
|
|
$
|
4,221
|
|
|
$
|
3,777
|
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
Advanced payments
|
$
|
12,124
|
|
|
$
|
9,529
|
|
Unearned income
|
18,491
|
|
|
26,365
|
|
||
|
$
|
30,615
|
|
|
$
|
35,894
|
|
•
|
Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Observable market-based inputs or observable inputs that are corroborated by market data; and
|
•
|
Level 3 — Unobservable inputs reflecting our own assumptions.
|
|
July 1, 2016
|
|
July 3, 2015
|
|
|
||||||||||||
(In thousands)
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Valuation
Inputs
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||
Bank certificates of deposit
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
598
|
|
|
$
|
598
|
|
|
Level 2
|
Money market funds
|
$
|
18,800
|
|
|
$
|
18,800
|
|
|
$
|
12,499
|
|
|
$
|
12,499
|
|
|
Level 1
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||
Bank certificates of deposit
|
$
|
222
|
|
|
$
|
222
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 2
|
Other current assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
64
|
|
|
$
|
64
|
|
|
Level 2
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Other accrued expenses:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
46
|
|
|
$
|
46
|
|
|
Level 2
|
(In thousands)
|
Severance and Benefits
|
||||||||||||||||||||||
Fiscal
2016-2017
Plan
|
|
Fiscal
2015-2016
Plan
|
|
Fiscal
2014-2015
Plan
|
|
Fiscal
2013-2014
Plan
|
|
Fiscal
2011
Plan
|
|
Total
|
|||||||||||||
Balance as of June 28, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,814
|
|
|
$
|
81
|
|
|
$
|
1,895
|
|
Charges, net
|
—
|
|
|
—
|
|
|
5,406
|
|
|
1,032
|
|
|
(28
|
)
|
|
6,410
|
|
||||||
Cash payments
|
—
|
|
|
—
|
|
|
(4,116
|
)
|
|
(2,632
|
)
|
|
(53
|
)
|
|
(6,801
|
)
|
||||||
Balance as of June 27, 2014
|
—
|
|
|
—
|
|
|
1,290
|
|
|
214
|
|
|
—
|
|
|
1,504
|
|
||||||
Charges, net
|
—
|
|
|
2,862
|
|
|
(29
|
)
|
|
(43
|
)
|
|
—
|
|
|
2,790
|
|
||||||
Cash payments
|
—
|
|
|
(2,212
|
)
|
|
(1,261
|
)
|
|
(65
|
)
|
|
—
|
|
|
(3,538
|
)
|
||||||
Balance as of July 3, 2015
|
—
|
|
|
650
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|
756
|
|
||||||
Charges, net
|
2,210
|
|
|
344
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
2,548
|
|
||||||
Cash payments
|
(698
|
)
|
|
(637
|
)
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
(1,367
|
)
|
||||||
Balance as of July 1, 2016
|
$
|
1,512
|
|
|
$
|
357
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
1,937
|
|
(In thousands)
|
Facilities and Other
|
||||||||||||||||||
Fiscal
2015-2016
Plan
|
|
Fiscal
2014-2015
Plan
|
|
Fiscal
2013-2014
Plan
|
|
Fiscal
2011
Plan
|
|
Total
|
|||||||||||
Balance as of June 28, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
472
|
|
|
$
|
291
|
|
|
$
|
763
|
|
Charges, net
|
—
|
|
|
446
|
|
|
4,375
|
|
|
(33
|
)
|
|
4,788
|
|
|||||
Cash payments
|
—
|
|
|
(354
|
)
|
|
(1,275
|
)
|
|
(258
|
)
|
|
(1,887
|
)
|
|||||
Balance as of June 27, 2014
|
—
|
|
|
92
|
|
|
3,572
|
|
|
—
|
|
|
3,664
|
|
|||||
Charges, net
|
641
|
|
|
1,306
|
|
|
130
|
|
|
—
|
|
|
2,077
|
|
|||||
Cash payments
|
(8
|
)
|
|
(608
|
)
|
|
(1,371
|
)
|
|
—
|
|
|
(1,987
|
)
|
|||||
Balance as of July 3, 2015
|
633
|
|
|
790
|
|
|
2,331
|
|
|
—
|
|
|
3,754
|
|
|||||
Charges, net
|
(62
|
)
|
|
77
|
|
|
(108
|
)
|
|
—
|
|
|
(93
|
)
|
|||||
Cash payments
|
(21
|
)
|
|
(584
|
)
|
|
(1,373
|
)
|
|
—
|
|
|
(1,978
|
)
|
|||||
Noncash adjustments
|
—
|
|
|
299
|
|
|
896
|
|
|
—
|
|
|
1,195
|
|
|||||
Balance as of July 1, 2016
|
$
|
550
|
|
|
$
|
582
|
|
|
$
|
1,746
|
|
|
$
|
—
|
|
|
$
|
2,878
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
By Expense Category:
|
|
||||||||||
Cost of product sales and services
|
$
|
154
|
|
|
$
|
151
|
|
|
$
|
196
|
|
Research and development
|
110
|
|
|
108
|
|
|
273
|
|
|||
Selling and administrative
|
1,572
|
|
|
1,928
|
|
|
2,952
|
|
|||
Total share-based compensation expense
|
$
|
1,836
|
|
|
$
|
2,187
|
|
|
$
|
3,421
|
|
By Types of Award:
|
|
|
|
|
|
||||||
Options
|
$
|
837
|
|
|
$
|
1,459
|
|
|
$
|
1,909
|
|
Restricted stock awards and units
|
933
|
|
|
688
|
|
|
748
|
|
|||
Performance shares and market condition shares
|
66
|
|
|
40
|
|
|
764
|
|
|||
Total share-based compensation expense
|
$
|
1,836
|
|
|
$
|
2,187
|
|
|
$
|
3,421
|
|
|
Shares
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Aggregate
Intrinsic
Value
|
|
|
|
|
|
|
(Years)
|
|
($ in thousands)
|
|
Options outstanding as of July 3, 2015
|
614,232
|
|
|
$34.61
|
|
4.05
|
|
$0
|
Granted
|
—
|
|
|
N/A
|
|
|
|
|
Exercised
|
—
|
|
|
N/A
|
|
|
|
|
Forfeited
|
(143,308
|
)
|
|
$31.69
|
|
|
|
|
Expired
|
(22,565
|
)
|
|
$86.16
|
|
|
|
|
Options outstanding as of July 1, 2016
|
448,359
|
|
|
$32.95
|
|
3.37
|
|
$0
|
Options exercisable as of July 1, 2016
|
364,353
|
|
|
$35.52
|
|
3.01
|
|
$0
|
Options vested and expected to vest as of July 1, 2016
|
442,063
|
|
|
$33.17
|
|
3.34
|
|
$0
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Fair value of options vested
|
$
|
1,395
|
|
|
$
|
1,990
|
|
|
$
|
2,234
|
|
|
Fiscal Year
|
||||||||
|
2016
|
|
2015
|
|
2014
|
||||
Expected dividends
|
N/A
|
|
—
|
%
|
|
—
|
%
|
||
Expected volatility
|
N/A
|
|
53.9
|
%
|
|
54.1
|
%
|
||
Risk-free interest rate
|
N/A
|
|
1.13
|
%
|
|
1.26
|
%
|
||
Expected term (years)
|
N/A
|
|
4.25
|
|
|
4.43
|
|
||
Weighted average grant date fair value per share granted
|
N/A
|
|
$
|
6.60
|
|
|
$
|
12.72
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||
Actual Range of Exercise Prices
|
Number
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise Price
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise Price
|
||||
|
|
|
|
|
(Years)
|
|
|
|
|
|
|
||
$14.88
|
—
|
$15.60
|
87,501
|
|
|
5.50
|
|
$15.35
|
|
42,235
|
|
|
$15.35
|
$20.64
|
—
|
$26.28
|
73,297
|
|
|
3.79
|
|
$25.59
|
|
59,474
|
|
|
$25.45
|
$27.36
|
—
|
$30.72
|
100,045
|
|
|
2.76
|
|
$28.88
|
|
99,948
|
|
|
$28.88
|
$31.20
|
—
|
$31.20
|
74,462
|
|
|
4.19
|
|
$31.20
|
|
49,642
|
|
|
$31.20
|
$32.52
|
—
|
$72.00
|
87,137
|
|
|
1.68
|
|
$49.75
|
|
87,137
|
|
|
$49.75
|
$77.28
|
—
|
$80.76
|
25,917
|
|
|
0.63
|
|
$77.48
|
|
25,917
|
|
|
$77.48
|
$14.88
|
—
|
$80.76
|
448,359
|
|
|
3.37
|
|
$32.95
|
|
364,353
|
|
|
$35.52
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|
Restricted stock outstanding as of July 3, 2015
|
79,767
|
|
|
$13.86
|
Granted
|
197,549
|
|
|
$11.84
|
Vested and released
|
(53,094
|
)
|
|
$13.76
|
Forfeited
|
(13,624
|
)
|
|
$13.55
|
Restricted stock outstanding as of July 1, 2016
|
210,598
|
|
|
$12.01
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|
Market-based stock unit outstanding as of July 3, 2015
|
—
|
|
|
N/A
|
Granted
|
158,766
|
|
|
$2.56
|
Forfeited
|
(9,597
|
)
|
|
$2.56
|
Market-based stock unit outstanding as of July 1, 2016
|
149,169
|
|
|
$2.56
|
|
Fiscal Year
|
||||||
|
2016
|
|
2015
|
|
2014
|
||
Expected Dividends
|
—
|
%
|
|
N/A
|
|
N/A
|
|
Expected volatility
|
52.4
|
%
|
|
N/A
|
|
N/A
|
|
Risk-free interest rate
|
1.21
|
%
|
|
N/A
|
|
N/A
|
|
Weighted average grant date fair value per share granted
|
$
|
2.56
|
|
|
N/A
|
|
N/A
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
||
Performance shares outstanding as of July 3, 2015
|
66,901
|
|
|
$14.98
|
|
Forfeited due to target thresholds not achieved
|
(66,725
|
)
|
|
$14.98
|
|
Forfeited due to terminations
|
(176
|
)
|
|
$14.98
|
|
Performance shares outstanding as of July 1, 2016
|
—
|
|
|
—
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
North America
|
$
|
125,482
|
|
|
$
|
153,239
|
|
|
$
|
142,027
|
|
Africa and Middle East
|
82,742
|
|
|
97,112
|
|
|
108,906
|
|
|||
Europe and Russia
|
20,539
|
|
|
35,990
|
|
|
36,043
|
|
|||
Latin America and Asia Pacific
|
39,927
|
|
|
49,537
|
|
|
59,056
|
|
|||
Total Revenue
|
$
|
268,690
|
|
|
$
|
335,878
|
|
|
$
|
346,032
|
|
(In thousands, except percentages)
|
Revenue
|
|
% of
Total Revenue
|
|||
Fiscal 2016:
|
|
|
|
|||
United States
|
$
|
121,283
|
|
|
45.1
|
%
|
Nigeria
|
$
|
28,862
|
|
|
10.7
|
%
|
Fiscal 2015:
|
|
|
|
|||
United States
|
$
|
151,066
|
|
|
45.0
|
%
|
Nigeria
|
$
|
36,459
|
|
|
10.9
|
%
|
Fiscal 2014:
|
|
|
|
|||
United States
|
$
|
139,234
|
|
|
40.2
|
%
|
Nigeria
|
$
|
52,189
|
|
|
15.1
|
%
|
(In thousands)
|
July 1,
2016 |
|
July 3,
2015 |
||||
United States
|
$
|
11,353
|
|
|
$
|
17,581
|
|
United Kingdom
|
2,946
|
|
|
3,094
|
|
||
New Zealand
|
2,618
|
|
|
1,797
|
|
||
Other countries
|
1,245
|
|
|
1,783
|
|
||
Total
|
$
|
18,162
|
|
|
$
|
24,255
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Income from operations of WiMAX
|
$
|
652
|
|
|
$
|
30
|
|
|
$
|
1,225
|
|
Gain on disposal
|
—
|
|
|
85
|
|
|
—
|
|
|||
Income taxes
|
(111
|
)
|
|
(21
|
)
|
|
(307
|
)
|
|||
Income from discontinued operations, net of tax
|
$
|
541
|
|
|
$
|
94
|
|
|
$
|
918
|
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
(4,248
|
)
|
|
$
|
(18,603
|
)
|
|
$
|
(26,735
|
)
|
Foreign
|
(24,295
|
)
|
|
(7,355
|
)
|
|
(23,818
|
)
|
|||
Total loss from continuing operations before income taxes
|
$
|
(28,543
|
)
|
|
$
|
(25,958
|
)
|
|
$
|
(50,553
|
)
|
|
Fiscal Year
|
||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Current provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
(125
|
)
|
Foreign
|
1,814
|
|
|
3,378
|
|
|
1,932
|
|
|||
State and local
|
24
|
|
|
23
|
|
|
(5
|
)
|
|||
|
1,969
|
|
|
3,401
|
|
|
1,802
|
|
|||
Deferred provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
(468
|
)
|
|
(216
|
)
|
|
—
|
|
|||
Foreign
|
134
|
|
|
(4,495
|
)
|
|
(337
|
)
|
|||
|
(334
|
)
|
|
(4,711
|
)
|
|
(337
|
)
|
|||
Total provision for (benefit from) income taxes from continuing operations
|
$
|
1,635
|
|
|
$
|
(1,310
|
)
|
|
$
|
1,465
|
|
|
Fiscal Year
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Statutory U.S. federal tax rate
|
(35.0
|
)%
|
|
(35.0
|
)%
|
|
(35.0
|
)%
|
Valuation allowances
|
23.1
|
%
|
|
(15.1
|
)%
|
|
30.0
|
%
|
Foreign non-deductible expenses
|
0.4
|
%
|
|
(0.3
|
)%
|
|
0.9
|
%
|
State and local taxes, net of U.S. federal tax benefit
|
(0.5
|
)%
|
|
(1.9
|
)%
|
|
(1.3
|
)%
|
Foreign income taxed at rates less than the U.S. statutory rate
|
21.1
|
%
|
|
38.5
|
%
|
|
8.5
|
%
|
Dividend from foreign subsidiary
|
(6.2
|
)%
|
|
—
|
%
|
|
—
|
%
|
Foreign branch income/withholding taxes
|
1.0
|
%
|
|
5.2
|
%
|
|
2.0
|
%
|
Change in uncertain tax positions
|
1.5
|
%
|
|
2.4
|
%
|
|
(1.7
|
)%
|
Other
|
0.3
|
%
|
|
1.2
|
%
|
|
(0.5
|
)%
|
Effective tax rate
|
5.7
|
%
|
|
(5.0
|
)%
|
|
2.9
|
%
|
|
July 1, 2016
|
|
July 3, 2015
|
||||||||||||
(In thousands)
|
Current
|
|
Non-Current
|
|
Current
|
|
Non-Current
|
||||||||
Deferred tax assets:
|
|
|
|
|
|
|
|
||||||||
Inventory
|
$
|
—
|
|
|
$
|
6,652
|
|
|
$
|
7,681
|
|
|
$
|
—
|
|
Accruals and reserves
|
—
|
|
|
2,497
|
|
|
4,641
|
|
|
66
|
|
||||
Bad debts
|
—
|
|
|
1,091
|
|
|
1,412
|
|
|
—
|
|
||||
Amortization
|
—
|
|
|
3,148
|
|
|
—
|
|
|
2,589
|
|
||||
Stock compensation
|
—
|
|
|
2,599
|
|
|
—
|
|
|
3,358
|
|
||||
Deferred revenue
|
—
|
|
|
1,759
|
|
|
—
|
|
|
1,906
|
|
||||
Unrealized exchange gain/loss
|
—
|
|
|
3,422
|
|
|
3,648
|
|
|
—
|
|
||||
Other
|
—
|
|
|
6,623
|
|
|
1,123
|
|
|
5,030
|
|
||||
Tax credit carryforwards
|
—
|
|
|
18,016
|
|
|
—
|
|
|
17,876
|
|
||||
Tax loss carryforwards
|
—
|
|
|
167,468
|
|
|
—
|
|
|
154,270
|
|
||||
Total deferred tax assets before valuation allowance
|
—
|
|
|
213,275
|
|
|
18,505
|
|
|
185,095
|
|
||||
Valuation allowance
|
—
|
|
|
(202,824
|
)
|
|
(17,043
|
)
|
|
(177,468
|
)
|
||||
Total deferred tax assets
|
—
|
|
|
10,451
|
|
|
1,462
|
|
|
7,627
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
|
||||||||
Branch undistributed earnings reserve
|
—
|
|
|
822
|
|
|
75
|
|
|
1,215
|
|
||||
Depreciation
|
—
|
|
|
4,596
|
|
|
—
|
|
|
3,468
|
|
||||
Other
|
—
|
|
|
462
|
|
|
94
|
|
|
—
|
|
||||
Total deferred tax liabilities
|
—
|
|
|
5,880
|
|
|
169
|
|
|
4,683
|
|
||||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
4,571
|
|
|
$
|
1,293
|
|
|
$
|
2,944
|
|
|
|
|
|
|
|
|
|
||||||||
As Reported on the Consolidated Balance Sheets
|
|
|
|
|
|
|
|
||||||||
Deferred income taxes assets
|
$
|
—
|
|
|
$
|
6,068
|
|
|
$
|
1,462
|
|
|
$
|
7,627
|
|
Deferred income taxes liabilities
|
—
|
|
|
1,497
|
|
|
169
|
|
|
4,683
|
|
||||
Total net deferred income taxes
|
$
|
—
|
|
|
$
|
4,571
|
|
|
$
|
1,293
|
|
|
$
|
2,944
|
|
(In thousands)
|
Amount
|
||
Unrecognized tax benefit as of June 28, 2013
|
$
|
28,698
|
|
Additions for tax positions in prior periods
|
8,705
|
|
|
Decreases for tax positions in prior periods
|
(12,055
|
)
|
|
Increases related to change of foreign exchange rate
|
2,861
|
|
|
Unrecognized tax benefit as of June 27, 2014
|
28,209
|
|
|
Additions for tax positions in prior periods
|
673
|
|
|
Decreases for tax positions in prior periods
|
(227
|
)
|
|
Decreases related to change of foreign exchange rate
|
(1,745
|
)
|
|
Unrecognized tax benefit as of July 3, 2015
|
26,910
|
|
|
Additions for tax positions in current periods
|
397
|
|
|
Additions for tax positions in prior periods
|
246
|
|
|
Decreases related to change of foreign exchange rate
|
(515
|
)
|
|
Unrecognized tax benefit as of July 1, 2016
|
$
|
27,038
|
|
Fiscal Years
|
Amount
|
||
|
(In thousands)
|
||
2017
|
$
|
4,217
|
|
2018
|
2,333
|
|
|
2019
|
1,215
|
|
|
2020
|
852
|
|
|
2021
|
874
|
|
|
Thereafter
|
2,231
|
|
|
Total
|
$
|
11,722
|
|
(In thousands, except per share amounts)
|
Q1
Ended 10/2/2015 |
|
Q2
Ended 1/1/2016 |
|
Q3
Ended 4/1/2016 |
|
Q4
Ended 7/1/2016 |
||||||||
Fiscal 2016
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
79,555
|
|
|
$
|
70,416
|
|
|
$
|
60,467
|
|
|
$
|
58,252
|
|
Gross margin
|
$
|
21,011
|
|
|
$
|
16,424
|
|
|
$
|
14,413
|
|
|
$
|
9,869
|
|
Operating loss
|
$
|
(1,598
|
)
|
|
$
|
(4,998
|
)
|
|
$
|
(7,594
|
)
|
|
$
|
(13,256
|
)
|
Net loss
|
$
|
(1,154
|
)
|
|
$
|
(5,534
|
)
|
|
$
|
(7,808
|
)
|
|
$
|
(15,141
|
)
|
Net loss attributable to Aviat Networks
|
$
|
(1,203
|
)
|
|
$
|
(5,679
|
)
|
|
$
|
(7,874
|
)
|
|
$
|
(15,151
|
)
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per common share
(1)
|
$
|
(0.23
|
)
|
|
$
|
(1.09
|
)
|
|
$
|
(1.50
|
)
|
|
$
|
(2.88
|
)
|
|
|
|
|
|
|
|
|
||||||||
(In thousands, except per share amounts)
|
Q1
Ended 9/26/2014 |
|
Q2
Ended 12/26/2014 |
|
Q3
Ended 4/3/2015 |
|
Q4
Ended 7/3/2015 |
||||||||
Fiscal 2015
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
82,441
|
|
|
$
|
90,868
|
|
|
$
|
74,839
|
|
|
$
|
87,730
|
|
Gross margin
|
$
|
22,042
|
|
|
$
|
23,974
|
|
|
$
|
16,046
|
|
|
$
|
18,628
|
|
Operating loss
|
$
|
(5,379
|
)
|
|
$
|
(3,748
|
)
|
|
$
|
(11,699
|
)
|
|
$
|
(5,104
|
)
|
Net loss
|
$
|
(5,466
|
)
|
|
$
|
(4,549
|
)
|
|
$
|
(13,167
|
)
|
|
$
|
(1,372
|
)
|
Net loss attributable to Aviat Networks
|
$
|
(5,466
|
)
|
|
$
|
(4,549
|
)
|
|
$
|
(13,167
|
)
|
|
$
|
(1,443
|
)
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net loss per common share
(1)
|
$
|
(1.06
|
)
|
|
$
|
(0.88
|
)
|
|
$
|
(2.54
|
)
|
|
$
|
(0.28
|
)
|
(1)
|
All per share data in this note have been retroactively adjusted for the Reverse Stock Split discussed in Note 1.
|
(In thousands)
|
Q1
Ended 10/2/2015 |
|
Q2
Ended 1/1/2016 |
|
Q3
Ended 4/1/2016 |
|
Q4
Ended 7/1/2016 |
||||||||
Fiscal 2016
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
$
|
21
|
|
|
$
|
34
|
|
|
$
|
804
|
|
|
$
|
1,596
|
|
Share-based compensation expense
|
493
|
|
|
429
|
|
|
460
|
|
|
454
|
|
||||
|
$
|
514
|
|
|
$
|
463
|
|
|
$
|
1,264
|
|
|
$
|
2,050
|
|
Income from discontinued operations
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
94
|
|
|
$
|
88
|
|
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
Q1
Ended 9/26/2014 |
|
Q2
Ended 12/26/2014 |
|
Q3
Ended 4/3/2015 |
|
Q4
Ended 7/3/2015 |
||||||||
Fiscal 2015
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets
|
$
|
95
|
|
|
$
|
95
|
|
|
$
|
95
|
|
|
$
|
95
|
|
Restructuring charges
|
1,497
|
|
|
(52
|
)
|
|
3,218
|
|
|
204
|
|
||||
Share-based compensation expense
|
580
|
|
|
449
|
|
|
696
|
|
|
462
|
|
||||
|
$
|
2,172
|
|
|
$
|
492
|
|
|
$
|
4,009
|
|
|
$
|
761
|
|
Income (loss) from discontinued operations
|
$
|
141
|
|
|
$
|
(62
|
)
|
|
$
|
(29
|
)
|
|
$
|
44
|
|
•
|
COSO Components - Risk Assessment and Monitoring Activities.
We determined that our controls pertaining to risk assessment and monitoring activities as of July 3, 2015 (our prior fiscal year end) did not operate effectively, resulting in a material weakness pertaining to these COSO components. Specifically, (i) with respect to risk assessment, we did not sufficiently identify and address risks associated with (a) the adequacy of training needs of employees whose job functions bear upon our accounting and financial reporting; (b) segregation of duty conflicts and the adequacy and effectiveness of compensating controls; and (c) certain processes, further noted in the Control Activities discussion below, resulted in inadequately designed control activities; and (ii) with respect to monitoring activities, (a) we did not design and maintain effective controls for the review, supervision and monitoring of our international accounting operations and for evaluating the adequacy of our internal control over financial reporting, including adequate documentation of control performance; and (b) there were insufficient procedures to effectively determine the adequacy of our internal control over financial reporting. The deficiencies in these COSO components are interrelated and represent a material weakness. This material weakness contributed to the other material weaknesses described below and an environment where there was more than a remote likelihood that a material misstatement of the interim and annual consolidated financial statements could occur and not be prevented or
|
•
|
Strengthened the oversight of the finance organization by hiring a new Vice President, Corporate Controller and Principal Accounting Officer, and a Senior Director of SEC Reporting and Compliance to supervise the design and execution of internal controls within the organization.
|
•
|
Enhanced the oversight of the SOX Compliance function through the leadership of the Senior Director of SEC Reporting and Compliance, who has direct access to our Audit Committee.
|
•
|
Aligned financial reporting control design with both the COSO 2013 framework and PCAOB standards, specifically related to management review controls.
|
•
|
Implemented changes in our IT infrastructure to require proper segregation of duties and change management procedures.
|
•
|
Completed the assessment of the existing roles and responsibilities and remediated system access and functionality issues.
|
•
|
Developed processes to monitor all remaining segregation of duties conflicts on an on-going basis.
|
•
|
Completed the related internal control design and implementation activities that included financial statement analytical reviews, review and approval controls in these areas, and an enhanced and expanded internal control certification by business process owners.
|
•
|
Increased and enhanced balance sheet reviews to allow more focus on quality account reconciliations and enhanced monitoring over international activities.
|
•
|
Increased communication of our accounting policies through on-going training.
|
•
|
Control Activities - Account Reconciliations.
The design and operating effectiveness of our controls were inadequate to ensure that account reconciliations were reviewed and approved for accuracy and completeness and that we identified, accumulated and documented appropriate information necessary to support account balances.
|
•
|
Control Activities - Revenue Recognition.
The design and operating effectiveness of our controls were inadequate to ensure that the terms and conditions of all negotiated customer discounts were agreed upon with the customer in advance of recognizing revenue to ensure that the reported amount and timing of revenue recognition was accurate.
|
•
|
Control Activities - Revenue Cut-off Procedures.
The design and operating effectiveness of our controls were inadequate to ensure that all revenue recognized on shipments made under FOB Destination terms was recognized in the proper period.
|
•
|
Control Activities - Project Accruals.
The design and operating effectiveness of our controls were inadequate to ensure that the project accrual balances were accurate.
|
•
|
Control Activities - Inventory Existence
. The design and operating effectiveness of our controls over inventory cycle counts and inventory at consigned locations were inadequate to ensure that the underlying quantities in support of inventory balances were accurate.
|
(a)
|
The following documents are filed as part of this report.
|
Schedule
|
Page
|
Schedule II — Valuation and Qualifying Accounts for the three fiscal years ended July 1, 2016
|
(b)
|
Exhibits.
|
|
|
|
AVIAT NETWORKS, INC.
(Registrant)
|
||
|
|
|
|
|
|
Date:
|
September 8, 2016
|
|
By:
|
|
/s/ Ralph S. Marimon
|
|
|
|
|
|
Ralph S. Marimon
|
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
||||
/s/ Michael A. Pangia
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
September 8, 2016
|
Michael A. Pangia
|
|
|
||
|
||||
/s/ Ralph S. Marimon
|
|
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
September 8, 2016
|
Ralph S. Marimon
|
|
|
||
|
|
|
|
|
/s/ Eric Chang
|
|
Vice President, Corporate Controller and
Principal Accounting Officer
(Principal Accounting Officer)
|
|
September 8, 2016
|
Eric Chang
|
|
|
||
|
||||
/s/ John Mutch
|
|
Chairman of the Board
|
|
September 8, 2016
|
John Mutch
|
|
|
|
|
|
|
|
|
|
/s/ William A. Hasler
|
|
Director
|
|
September 8, 2016
|
William A. Hasler
|
|
|
|
|
|
||||
/s/ James R. Henderson
|
|
Director
|
|
September 8, 2016
|
James R. Henderson
|
|
|
|
|
|
||||
/s/ Robert G. Pearse
|
|
Director
|
|
September 8, 2016
|
Robert G. Pearse
|
|
|
|
|
|
||||
/s/ John Quicke
|
|
Director
|
|
September 8, 2016
|
John Quicke
|
|
|
|
|
|
||||
/s/ James C. Stoffel
|
|
Director
|
|
September 8, 2016
|
James C. Stoffel
|
|
|
|
|
(In thousands)
|
Balance at
Beginning of
Period
|
|
Additions Charged to
Costs and
Expenses
|
|
Deductions
|
|
Balance
at End
of Period
|
||||||||
Allowances for collection losses:
|
|
|
|
|
|
|
|
||||||||
Year ended July 1, 2016
|
$
|
6,641
|
|
|
$
|
2,431
|
|
|
$
|
1,105
|
|
(A)
|
$
|
7,967
|
|
Year ended July 3, 2015
|
$
|
7,442
|
|
|
$
|
1,302
|
|
|
$
|
2,103
|
|
(B)
|
$
|
6,641
|
|
Year ended June 27, 2014
|
$
|
10,256
|
|
|
$
|
1,535
|
|
|
$
|
4,349
|
|
(C)
|
$
|
7,442
|
|
Ex. #
|
|
Description
|
|
|
|
2.1
|
|
Intentionally omitted
|
2.2
|
|
Intentionally omitted
|
2.3
|
|
Intentionally omitted
|
2.4
|
|
Asset Purchase Agreement by and among Aviat U.S., Inc. and EION Networks, Inc., dated as of September 2, 2011 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on September 9, 2011, File No. 001-33278)
|
3.1
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Aviat Networks, Inc., as filed with the Secretary of State of the State of Delaware on June 10, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on June 13, 2016, File No. 001-33278)
|
3.2
|
|
Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on September 7, 2016)
|
3.3
|
|
Amended and Restated Bylaws of Aviat Networks, Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on October 2, 2015, File No. 001-33278)
|
3.4
|
|
Certificate of Ownership and Merger Merging Aviat Networks, Inc. into Harris Stratex Networks, Inc., effective January 27, 2010, as filed with the Secretary of State of the State of Delaware on January 27, 2010 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 28, 2010, File No. 001-33278)
|
4.1
|
|
Intentionally omitted
|
4.1.1
|
|
Specimen common stock certificate, adopted as of January 29, 2010 (incorporated by reference to Exhibit 4.1.1 to the Annual Report on Form 10-K for fiscal year end July 2, 2010 filed with the SEC on September 9, 2010, File No. 001-33278)
|
4.2
|
|
Intentionally omitted
|
4.3
|
|
Intentionally omitted
|
4.4
|
|
Tax Benefit Preservation Plan, dated September 6, 2016, by and between Aviat Networks, Inc. and Computershare Inc., as Rights Agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on September 7, 2016)
|
10.1
|
|
Intentionally omitted
|
10.2
|
|
Intentionally omitted
|
10.3
|
|
Intellectual Property Agreement between Harris Stratex Networks, Inc. and Harris Corporation dated January 26, 2007 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278)
|
10.4
|
|
Intentionally omitted
|
10.5
|
|
Intentionally omitted
|
10.6
|
|
Intentionally omitted
|
10.6.1
|
|
Intentionally omitted
|
10.7
|
|
Intentionally omitted
|
10.8
|
|
Intentionally omitted
|
10.9
|
|
Intentionally omitted
|
10.10
|
|
Tax Sharing Agreement between Harris Stratex Networks, Inc. and Harris Corporation dated January 26, 2007 (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278)
|
10.11
|
|
Intentionally omitted
|
10.12*
|
|
Intentionally omitted
|
10.13*
|
|
Intentionally omitted
|
10.13.1*
|
|
Intentionally omitted
|
Ex. #
|
|
Description
|
|
|
|
10.14*
|
|
Standard Form of Executive Employment Agreement between Harris Stratex Networks, Inc. and certain executives (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed with the SEC on February 1, 2007, File No. 001-33278)
|
10.15
|
|
Form of Indemnification Agreement between Harris Stratex Networks, Inc. and its directors and certain officers (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-1 of Stratex Networks, Inc., File No. 33-13431)
|
10.16
|
|
Intentionally omitted
|
10.17*
|
|
Harris Stratex Networks, Inc. Annual Incentive Plan (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K for the fiscal year ended June 27, 2008 filed with the SEC on September 25, 2008, File No. 001-33278)
|
10.18*
|
|
Intentionally omitted
|
10.18.1
|
|
Intentionally omitted
|
10.18.2
|
|
Aviat Networks, Inc. 2007 Stock Equity Plan (as Amended and Restated Effective November 13, 2015)(incorporated by reference to Appendix A to Schedule 14A filed with the SEC on October 1, 2015, File No. 001-33278)
|
10.19
|
|
Intentionally omitted
|
10.19.1
|
|
Intentionally omitted
|
10.20
|
|
Intentionally omitted
|
10.20.1
|
|
Intentionally omitted
|
10.20.2
|
|
Intentionally omitted
|
10.20.3
|
|
Second Amended and Restated Loan and Security Agreement, dated as of March 28, 2014, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd., and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 31, 2014, File No. 001-33278)
|
10.20.4
|
|
Amendment #1 to Second Amended and Restated Loan and Security Agreement, dated as of September 25, 2014, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd. and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on September 29, 2014, File No. 001-33278)
|
10.20.5
|
|
Amendment #2 to Second Amended and Restated Loan and Security Agreement, dated as of October 30,2014, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd. and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on October 30, 2014, File No. 001-33278)
|
10.20.6
|
|
Amendment #3 to Second Amended and Restated Loan and Security Agreement, dated as of December 2, 2014, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd., and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 5, 2014, File No. 001-33278)
|
10.20.7
|
|
Amendment #4 to Second Amended and Restated Loan and Security Agreement, dated February 27, 2015, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd., and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on March 3, 2015, File No. 001-33278)
|
10.20.8
|
|
Amendment #5 to Second Amended and Restated Loan and Security Agreement, dated as of March 30, 2016, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd. and Silicon Valley Bank (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 1, 2016, File No. 001-33278)
|
10.20.9
|
|
Amendment #6 to Second Amended and Restated Loan and Security Agreement, dated as of June 30, 2016, by and among Aviat Networks, Inc., Aviat U.S., Inc., Aviat Networks (S) Pte. Ltd. and Silicon Valley Bank (incorporate by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 1, 2016, File No. 001-33278)
|
10.21
|
|
Intentionally omitted
|
10.22*
|
|
Intentionally omitted
|
10.22.1*
|
|
Intentionally omitted
|
10.23*
|
|
Employment Agreement, dated as of April 1, 2006, between Harris Stratex Networks, Inc. and Heinz Stumpe (incorporated by reference to Exhibit 10.15.2 to the Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2007 filed with the SEC on May 8, 2007, File No. 001-33278)
|
10.24*
|
|
Intentionally omitted
|
Ex. #
|
|
Description
|
|
|
|
10.24.1*
|
|
Intentionally omitted
|
10.24.2*
|
|
Intentionally omitted
|
10.25*
|
|
Employment Agreement, dated as of May 14, 2002, between Stratex Networks, Inc. and Shaun McFall (incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K for the fiscal year ended July 3, 2009 filed with the SEC on September 4, 2009, File No. 001-33278)
|
10.25.1*
|
|
Amendment, effective April 1, 2006, to Employment Agreement, dated May 14, 2002, between Stratex Networks, Inc. and Shaun McFall (incorporated by reference to Exhibit 10.25.1 to the Annual Report on Form 10-K for the fiscal year ended July 3, 2009 filed with the SEC on September 4, 2009, File No. 001-33278)
|
10.26*
|
|
Intentionally omitted
|
10.26.1*
|
|
Intentionally omitted
|
10.27*
|
|
Intentionally omitted
|
10.28*
|
|
Employment Agreement, dated July 18, 2011, between Aviat Networks, Inc. and Michael Pangia (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 20, 2011, File No. 001-33278)
|
10.29*
|
|
Employment Agreement, dated December 30, 2010, between Aviat Networks, Inc. and John Madigan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 4, 2011, File No. 001-33278)
|
10.30*
|
|
Employment Agreement, dated December 29, 2014, between Aviat Networks, Inc. and Michael Shahbazian (incorporated by reference to the Current Report on Form 8-K filed with the SEC on December 29, 2014, File No. 001-33278)
|
10.31*
|
|
Employment Agreement, dated April 29, 2015, between Aviat Networks, Inc. and Ralph S. Marimon (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 14, 2015, File No. 001-33278)
|
10.32
|
|
Letter Agreement, dated as of January 11, 2015, among Aviat Networks, Inc., Steel Partners Holdings L.P., Lone Star Value Management, LLC and certain other parties (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 12, 2015, File No. 001-33278)
|
10.33*
|
|
Employment Agreement, dated January 20, 2016, between Aviat Networks, Inc. and Eric Chang (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 21, 2016, File No. 001-33278)
|
10.34
|
|
Lease Agreement, dated June 8, 2016, between Aviat Networks, Inc., through its wholly owned subsidiary Aviat U.S., Inc., and The Irvine Company LLC
|
10.35
|
|
Lease Termination Agreement, dated June 1, 2016, between Aviat Networks, Inc., through its wholly owned subsidiary Aviat U.S., Inc., and Aslan Newcastle Great America Owner, L.L.C.
|
16.1
|
|
Intentionally omitted
|
16.2
|
|
Letter from KPMG LLP to the Securities and Exchange Commission dated February 26, 2015 (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on March 3, 2015)
|
21
|
|
List of Subsidiaries of Aviat Networks, Inc.
|
23.1
|
|
Consent of BDO USA, LLP
|
23.2
|
|
Consent of KPMG LLP
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Management compensatory contract, arrangement or plan required to be filed as an exhibit pursuant to Item 15(b) of this report.
|
|
|
1.
|
Tenant’s Trade Name
: N/A
|
2.
|
Premises:
Suite No. 200 (The Premises are more particularly described in Section 2.1)
|
3.
|
Use of Premises
: General office, research and development and computer lab.
|
4.
|
Estimated
Commencement Date
: 8 weeks from and after the date of this Lease
|
5.
|
Lease Term
: 60 months, plus such additional days as may be required to cause this Lease to expire on the final day of the calendar month.
|
6.
|
Basic Rent
:
|
Months of Term
or Period
|
Monthly Rate Per Rentable Square Foot
|
Monthly Basic Rent (rounded to the nearest dollar)
|
1 to 12
|
$1.35
|
$25,650.00
|
13 to 24
|
$1.39
|
$26,410.00
|
25 to 36
|
$1.43
|
$27,170.00
|
37 to 48
|
$1.48
|
$28,120.00
|
49 to 60
|
$1.52
|
$28,880.00
|
7.
|
Expense Recovery Period
: Every twelve month period during the Term (or portion thereof during the first and last Lease years) ending June 30.
|
8.
|
Floor Area of Premises
: approximately 19,000 rentable square feet
|
9.
|
Security Deposit
: $31,768.00
|
10.
|
Broker(s)
: Irvine Realty Company and CBRE, Inc. (collectively, "
Landlord's Broker
") is the agent of Landlord exclusively and CBRE, Inc./Palo Alto ("
Tenant's Broker
") is the agent of Tenant exclusively.
|
11.
|
Parking
: 72 parking spaces in accordance with the provisions set forth in
Exhibit F
to this Lease.
|
12.
|
Address for Payments and Notices
:
|
LANDLORD
|
TENANT
|
Payment Address:
THE IRVINE COMPANY LLC
P.O. Box #841122
San Francisco, CA 94139-1122
Notice Address:
THE IRVINE COMPANY LLC
550 Newport Center Drive
Newport Beach, CA 92660
Attn: Senior Vice President, Property Operations
Irvine Office Properties
|
AVIAT U.S., INC.
860 N McCarthy Blvd, Suite 200
Milpitas, CA 95035
|
LANDLORD:
THE IRVINE COMPANY LLC,
a Delaware limited liability company
|
|
TENANT:
AVIAT U.S., INC.,
a Delaware corporation
|
||
By:
|
/s/ Steven S. Case
|
|
By:
|
/s/ Ralph Marimon
|
|
Steven S. Case
|
|
Printed Name:
|
Ralph Marimon
|
|
Executive Vice President
Office Properties
|
|
Title:
|
CFO
|
|
|
|
|
|
By:
|
/s/ Michael T. Bennett
|
|
By:
|
/s/ Kevin Holwell
|
|
Michael T. Bennett
|
|
Printed Name:
|
Kevin Holwell
|
|
Senior Vice President, Operations
Office Properties |
|
Title:
|
VP Finance
|
I.
|
Tenant hereby designates Sandy Johnson (“
Tenant’s Construction Representative
”), Telephone No. (408) 567-6701, Email: sandy.johnson@aviantnet.com, as its representative, agent and attorney-in-fact for all matters related to the Tenant Improvement Work, including but not by way of limitation, for purposes of receiving notices, approving submittals and issuing requests for Changes, and Landlord shall be entitled to rely upon authorizations and directives of such person(s) as if given directly by Tenant. The foregoing authorization is intended to provide assurance to Landlord that it may rely upon the directives and decision making of the Tenant’s Construction Representative with respect to the Tenant Improvement Work and is not intended to limit or reduce Landlord’s right to reasonably rely upon any decisions or directives given by other officers or representatives of Tenant. Any notices or submittals to, or requests of, Tenant related to this Work Letter and/or the Tenant Improvement Work may be sent to Tenant’s Construction Representative at the email address above provided. Tenant may amend the designation of its Tenant’s Construction Representative(s) at any time upon delivery of written notice to Landlord.
|
A.
|
Landlord shall complete, or cause to be completed, the Tenant Improvements, at the construction cost shown in the Final Cost Estimate (subject to increases for Landlord approved Changes and as otherwise provided in this Work Letter), in accordance with final Working Drawings and Specifications approved by both Landlord and Tenant.
|
B.
|
Landlord shall pay up to $95,000.00, based on $5.00 per usable square foot of the Premises
("
Landlord's Maximum Contribution
"), of the final “Completion Cost” (as defined below). Tenant acknowledges that the Landlord's Maximum Contribution is intended only as the maximum amount Landlord will pay toward approved Tenant Improvements, and not by way of limitation, any partitions, modular office stations, fixtures, cabling, furniture and equipment requested by Tenant are in no event subject to payment as part of Landlord’s Contribution. In the event the Completion Cost of the Tenant Improvement Work is less than the Landlord’s Maximum Contribution, Landlord’s actual contribution toward the Completion Cost ("
Landlord's Contribution
") shall equal such lesser amount, and Tenant shall have no right to receive any credit, refund or allowance of any kind for any unused portion of the Landlord's Maximum Contribution nor shall Tenant be allowed to make revisions to an approved Preliminary Plan, Working Drawings and Specifications or request a Change in an effort to apply any unused portion of Landlord's Maximum Contribution. It is further understood and agreed that the Tenant Improvements shall be substantially completed not later than 90 days following the Commencement Date to be eligible for funding by Landlord, and that Landlord shall not be obligated to fund any portion of the Landlord’s Contribution towards the Tenant Improvements commenced after such date.
|
C.
|
Tenant shall pay any costs due to inaccurate or incomplete Programming Information and the amount, if any, by which aggregate Completion Cost for the Tenant Improvement Work exceeds the Landlord’s Maximum Contribution. The amounts to be paid by Tenant for the Tenant Improvements pursuant to this Section II.C. are sometimes cumulatively referred to herein as the “
Tenant’s Contribution
”.
|
D.
|
The “
Completion Cost
” shall mean all costs of Landlord in completing the Tenant Improvements in accordance with the approved Working Drawings and Specifications and with any approved Changes thereto, including but not limited to the following costs: (i) payments made to architects, engineers, contractors, subcontractors and other third party consultants in the performance of the work, (ii) permit fees and other sums paid to governmental agencies, and (iii) costs of all materials incorporated into the work or used in connection with the work. The Completion Cost shall also include a construction management fee to be paid to Landlord or to Landlord's management agent in the amount of three percent (3%) of the Completion Cost not to exceed $4,000.00. Unless expressly
|
|
|
"
LANDLORD
":
ASLAN NEWCASTLE GREAT AMERICA OWNER, L.L.C.,
a Delaware limited liability company
|
|
|
By: /s/ Timothy E. McChesney
Name:Timothy E. McChesney
Title:Managing Director
|
|
|
|
|
|
|
|
|
"
TENANT
":
AVIAT U.S., INC.,
a Delaware corporation
|
|
|
By: /s/ Ralph Marimon Name: Ralph Marimon Title:CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary
|
State or Other Jurisdiction of Incorporation
|
Aviat Networks Algeria S.A.R.L.
|
Algeria
|
Aviat Networks (Australia) Pty. Ltd. .
|
Australia
|
Aviat Networks (Bangladesh) Limited
|
Bangladesh
|
Aviat Networks Brasil Servicos em Communicacoes Ltda.
|
Brazil
|
Aviat Networks Canada ULC
|
Canada
|
Aviat Communications Technology (Shenzhen) Company Ltd.
|
The People’s Republic of China
|
Aviat Networks France S.A.S.
|
France
|
Aviat Networks Ghana Limited
|
Ghana
|
Aviat Networks Holland B.V.
|
The Netherlands
|
Aviat Networks HK Limited
|
Hong Kong
|
Aviat Networks (India) Private Limited
|
India
|
Telsima Communications Private Limited
|
India
|
Pt. Aviat Networks Indonesia
|
Indonesia
|
Aviat Networks Côte d’Ivoire
|
Ivory Coast
|
Aviat Networks (Kenya) Limited
|
Kenya
|
Aviat Networks Malaysia Sdn. Bhd.
|
Malaysia
|
Digital Microwave (Mauritius) Private Limited
|
Mauritius
|
Aviat Networks México S.A. de C.V.
|
Mexico
|
Aviat Networks (NZ) Limited
|
New Zealand
|
Aviat Networks Communication Solutions Limited
|
Nigeria
|
Stratex Networks Nigeria Limited
|
Nigeria
|
Aviat Networks (Clark) Corporation
|
The Philippines
|
Aviat Networks Philippines, Inc.
|
The Philippines
|
Aviat Networks Polska Sp. z.o.o.
|
Poland
|
Aviat Networks Solutions LLC
|
Russia
|
Aviat Networks (S) Pte. Ltd.
|
Republic of Singapore
|
Aviat storitveno podjetje, d.o.o.
|
Slovenia
|
Aviat Networks (South Africa) (Proprietary) Limited
|
Republic of South Africa
|
MAS Technology Holdings (Proprietary) Limited
|
Republic of South Africa
|
DMC Stratex Networks (South Africa) (Proprietary) Limited
|
Republic of South Africa
|
Aviat Ubuntu Telecommunication (Pty) Limited
|
Republic of South Africa
|
Aviat Networks Tanzania Limited
|
Tanzania
|
Aviat Networks (Thailand) Ltd.
|
Thailand
|
Aviat Networks (UK) Limited
|
Delaware
|
Aviat International Holdings, Inc.
|
Delaware
|
Aviat U.S., Inc.
|
Delaware
|
Telsima Corporation
|
Delaware
|
Aviat Networks Telecommunications Zambia Limited
|
Zambia
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
July 1, 2016
, of Aviat Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
September 8, 2016
|
/s/ Michael A. Pangia
|
||
|
|
Name:
|
|
Michael A. Pangia
|
|
|
Title:
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended
July 1, 2016
, of Aviat Networks, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
September 8, 2016
|
/s/ Ralph S. Marimon
|
||
|
|
Name:
|
|
Ralph S. Marimon
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer, Principal Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Aviat Networks as of the dates and for the periods expressed in the Report
|
Date:
|
September 8, 2016
|
/s/ Michael A. Pangia
|
||
|
|
Name:
|
|
Michael A. Pangia
|
|
|
Title:
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Aviat Networks as of the dates and for the periods expressed in the Report
|
Date:
|
September 8, 2016
|
/s/ Ralph S. Marimon
|
||
|
|
Name:
|
|
Ralph S. Marimon
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer, Principal Financial Officer
|